Transport & logistics: Haul or nothing

The fuel protest of 2000 illustrated the importance of the haulage industry to the UK economy and highlighted just how much our lives are touched by, or even totally dependent on, logistics and distribution.

Now, five years on, employers’ bodies are concerned that the implementation of new working time laws could represent a similarly seminal moment in the development of the sector.

Many are describing the Road Transport (Working Time) Directive as the most significant and profound legislation to touch the industry’s workforce in more than a generation.

The Road Haulage Association (RHA) estimates the new rules, which came into force on 4 April, will affect more than 60,000 transport employers and as many as half a million drivers across the UK.

It seems the long-awaited and much debated directive has left all sides cold, with trade bodies concerned about the potentially devastating impact on business and unions convinced the regulations have been fatally watered down.

The directive limits the working hours of drivers and crew of vehicles of more than 3.5 tonnes to a maximum of 48 hours of work per week, calculated over a period of four months or, by agreement, six months.

There is some leeway, however, drivers are allowed to work 60 hours in a single week as long as the overall average working time (calculated over the reference period) does not rise above 48 hours per week.

Although recent Freight Transport Association (FTA) figures suggest the sector is in good shape, with nearly a third of operators reporting an increase in activity, the launch of the new directive could prove a catalyst for other inherent problems within the sector, most notably chronic skills shortages.

Paul Whitfield, a solicitor at law firm Furley Page has many clients in the transport sector and has held seminars to help raise awareness.“It’s hard to tell how it will affect the industry until it has been in place for a few months. At our last seminar there was a real divergence of opinion. Some think that it’s going to have a huge, negative impact on the industry whereas others think it’s just a case of making adjustments to current working practices,” he says.

Whitfield believes the rules are manageable but will prove more problematic for smaller operators, particularly as the final version of the draft was released so late, giving them little time to prepare.

“Loading, cleaning and a range of other daily tasks carried out by drivers are included in the hours they are allowed to work. Anything relating to transport should be classed as driving hours and this could prove difficult,” he adds.

“I don’t think anybody is happy with the final version of the regulations. Businesses feel it will be too costly, while the unions seem to think the rules don’t go far enough.”

The Regulations will be enforced by the Vehicle and Operator Services Agency (VOSA) and Whitfield feels they will take a lighter touch at first.“VOSA will enforce the rules and will have the right to enter properties and inspect records. I understand they will take a more advisory role initially, until the system has bedded in,” he says.

The implementation seems to be the tip of the iceberg and although many employers will cope with new working practices, the directive could reveal deeper seeded problems. Estimates vary but there is a staggering shortage of drivers in the UK, with the industry somewhere between 40,000 and 70,000 short.

Julian Hemming, head of employment at law firm Osborne Clarke, warns that the rules could compound the current situation: “In theory, it will push up the need for businesses to increase the number of drivers they use and in the long run will push up the rates of pay because drivers are not coming into the industry.

“There will need to be more recruitment because even if companies work more efficiently there will still be a shortfall of drivers,” he says.However, Hemming thinks most employers are coping well and introducing policies that let them use existing staff more innovatively – a vital approach because time spent loading vehicles or waiting to drop off goods are all counted as working time.

“The majority of companies have been very proactive about the changes and the impact they might have. Many have changed the way they roster staff to allow them to operate far more flexibly. They are using other staff for loading or asking customers to help so the drivers hours are not used up on tasks when they are not actually driving,” he explains.

Hemming concedes that there are dangerous grey areas such as periods of availability, which are not classed as working time and the employment status of some workers – there is a strict criteria for identifying and using self-employed drivers.

He also advises employers to put sound whistleblowing policies in place so drivers can report problems in confidence and organisations can deal with any problems at the earliest possible stage.

“Employers must look at this legislation very carefully because if there is an accident on the roads and directors have ignored the rules, the courts can hand out custodial sentences,” he says.

Despite this, the argument that most of the large operators are coping well is backed up by the amount of preparation carried out by some of the big players. Supermarket chain Asda has a massive distribution network and has been preparing for the directive for more than two years. It used experts from the FTA to roll out a major training programme for its transport management teams. Regional people manager Helen Gospill says: “We’ve been working with our drivers to find the most flexible ways of managing our people. It is important to ensure we have sufficient flexibility within our operation to respond to our customers’ needs.”

Eversheds partner Owen Warnock thinks the rules will put a strain on staffing and resources and could even have an impact on the employment relationship.

“In motor transport most people do overtime, so this could have a huge impact on businesses because they will need to take on more drivers – but there’s a shortage of them already. Crucially it will also affect how much drivers can earn and it could harm morale if people can’t earn the same amount of money,” he says.

“It also affects the number of vehicles within firms. Companies will need to look at how they roster vehicles to make sure they can match free vehicles with free drivers. If companies have drivers that usually do loading things could be problematic. Some have already started recruiting new drivers from Eastern Europe to fill the gaps,” Warnock says.

This seems to be the one point where there is widespread agreement: all stakeholders seem to be aware that the industry desperately needs to attract more and younger recruits. The FTA estimates the shortage of drivers is currently around 76,000 but, crucially, that the average age of those working in the sector has now crept above 50.

Bob Monks, general secretary of the United Road Transport Union (URTU) is furious at the way the rules have been implemented and claims the sector has missed a golden opportunity to usher in change. “We are happy that the regulations have been brought in, but the way they have been implemented is far from satisfactory. They have been so watered down and are so imprecise that they will have little practical impact on the drivers.

“The commercial driver situation in the UK is based on a long hours culture, with low rates of pay and high levels of overtime earnings. Naturally, this has a massive impact on recruitment,” he says.

Monks says the directive will only create confusion and could even exacerbate the current driver shortages. “One of the sure-fire ways of not attracting new people into this industry is keeping the status quo. This directive was a golden opportunity to change the whole industry for the better and provide a professional, attractive career.

“Employers have not really recognised that there is a genuine problem in the industry and that people are not attracted to this as a career. Instead, businesses are now recruiting people from Eastern Europe, which is driving down the pay rates even further. This does not deal with the problem – it is just a short term fix,” he adds.

He admits that many larger employers have introduced workplace agreements and tackled the problems in a more enlightened way, but is sure that unscrupulous businesses will simply flout the rules.

However, the well-meaning health and safety intentions of the legislation have been applauded by trade unions and employers.

Transport and Salaried Staff Association (TSSA) general secretary Gerry Doherty believes the directive will help reduce road accidents and improve driver safety. “Protection from working excessive hours is long overdue for the drivers of heavy goods and passenger vehicles and should be welcomed by workers and the general public alike. Driver fatigue is a hazard not only for drivers, but for other road users.”

Regardless of opinion, the rules are now in place so employers must follow them or face the serious penalties, but with the removal of the UK’s opt-out of the overall Working Time Directive again being mooted, there will be many HR practitioners studying the way the transport sector handles the 48-hour week.

The new rules and what they mean for UK business

The Working Time (Road Transport) Regulations came into force on 4 April 2005 after three years of legal wrangling and bitter arguments within the industry. The rules will limit mobile workers to a 48-hour working week, with no option for staff to opt out.

Drivers are allowed to work up to 60 hours in a single week, as long as the average working week does not exceed 48 hours over the reference period.

The averages are calculated over four-month reference periods although this can be extended to six months by agreement.

Mobile workers are regarded as those that form the travelling staff of vehicles of more than 3.5 tonnes, typically drivers and crew, but also apprentices and trainees.

Under the directive night working is also limited to 10 hours in any 24-hour working period. This is classed as any work done between the hours of midnight and 4 am.

Employers are responsible for informing staff of the regulations and must also retain all the relevant records for up to two years. The rules are enforced by the Vehicle and Operator Services Agency (VOSA) and companies must issue enforcement officers and individual employees with copies of the records on request.

The Freight Transport Association (FTA) has launched an in-depth study into the impact of the Working Time (Road Transport) Regulations on the industry. The group has teamed up with property consultants NAI Fuller Peiser to track and gauge the affect of the new rules on employers.

The FTA believes the regulations could reduce productivity by as much as 10% and cost the industry as a whole more than 1bn. Working time is also expected to have an impact on the commercial property sector, because it will influence the location of warehouses and distribution centres.

The Working Time Impact Study will collate the views of companies in the sector in quarterly reports, designed to measure the impact of the legislation on British business. FTA policy director James Hookham says the directive could have a huge impact on UK plc: “It will be one of the most expensive and wide-ranging pieces of legislation to affect operators and drivers.

The study will look at the influence the regulations are having on the labour market including wage inflation, premium payments, the need for additional drivers and vehicles; and crucially the location of distribution centres.”